To get NBC, Comcast still has persuading to do

WASHINGTON 
Before Comcast Corp. can transform the entertainment business by taking control of NBC Universal, it must convince Washington that the plan won't hurt rivals and consumers. And the promises the cable company has made so far don't impress opponents who want federal regulators to attach strict conditions to the deal.

To show that it would not abuse its control over NBC's broadcast networks, cable TV channels and movie studios, the nation's largest cable provider is making nine pledges, including a vow not to move the NBC broadcast network to cable and a commitment to expand public interest programming.

But consumer groups and competitors say Comcast is offering token concessions that don't address their biggest fears about the NBC combination.

"Comcast is either promising to do what it was already planning to do or simply what it is required to do by law," says Corie Wright, policy counsel at the public interest group Free Press. "I don't think Comcast can just tie a bow around the status quo and call it a public interest commitment."

Comcast is quick to defend its position. "We think we have made significant and meaningful commitments that are designed to ensure the deal is pro-consumer," says Comcast Executive Vice President David Cohen.

Now it is up to Washington to decide. The Justice Department and the Federal Communications Commission are examining Comcast's plans to buy a 51 percent stake in NBC Universal from General Electric Co. for $13.75 billion. Those reviews could last up to a year. Congressional hearings are also scheduled for February.

The government will scrutinize the implications of allowing a company with nearly 24 million cable customers and nearly 16 million broadband subscribers to take control of so much popular programming.

Comcast already owns cable channels, including E! Entertainment and the Golf Channel. It also has a controlling interest in the Philadelphia 76ers and Flyers, and its SportsNet Philadelphia channel carries Flyers, Phillies and Sixers games.

NBC Universal would give it the NBC and Telemundo broadcast networks; 26 local TV stations; popular cable channels such as CNBC, Bravo and Oxygen; the Universal Pictures movie studio and theme parks; and a stake in Hulu, which distributes TV programming online.

This week, Comcast and NBC will file paperwork with the Justice Department to comply with the Hart-Scott-Rodino Act, an antitrust law governing mergers and alliances. It will also file a public interest statement with the FCC, which must approve the transfer of NBC's broadcast licenses.

Those filings will provide more detail on Comcast's public interest commitments. Already, though, two key elements are clear: Comcast promises to keep providing free, over-the-air broadcasts of the NBC and Telemundo networks, and it pledges to extend the FCC's "program access rules" to the local NBC and Telemundo stations it would acquire.

The program access rules are designed to ensure that satellite TV and other rival video services can carry channels owned by cable companies. The rules require cable companies to make their channels available to rivals on equal terms.

Comcast says the program access rules do not automatically apply to local NBC and Telemundo broadcast programming and insists that its offer to extend the rules is therefore significant.